COMPANIES DISH OUT A DELUGE OF DEALS: BUYOUTS OF LEASEWAY AND REVCO AMONG THE NOTABLE TRANSACTIONS OF 1995

1995 was a year Monte Hall would have loved, because there were deals aplenty across the country and in Greater Cleveland.
According to research by Crain's Cleveland Business, there were at least 72 mergers and acquisitions involving Cleveland's publicly traded companies last year. That figure included 23 instances where local companies sold subsidiaries or divisions, 43 cases where local companies made acquisitions and six transactions where local companies were themselves purchased.
Among the largest and most memorable deals of 1995 was the March acquisition of the Beachwood trucking cocern Leaseway Transportation Corp. by Penske Truck Leasing Co. of Reading, Pa., for $200 million and the November announcement of Rite Aid Corp.'s acquisition of a controlling interest in Revco D.S. Inc. for $1.8 billion. The latter will cost as many as 1,600 jobs, including more than 900 at Revco's headquarters in Twinsburg.
Like any big river, 1995's flow of deals was fed by a number of sources and tributaries. Large public companies were out in droves, functioning as what investment bankers call 'strategic buyers' and using their own stock to purchase smaller companies as their own industries consolidated.
As these companies bought up their smaller competitors, they got bigger, and, in theory, more efficient. The consolidation often meant tougher competition, which created a demand for yet more efficiency and made it all the harder for smaller companies to make it on their own.
A big beneficiary of that environment was Elyria-based Invacare Corp. Throughout the year, the maker of wheelchairs and other health care equipment acquired nine smaller companies in its industry.
Invacare spokeswoman Susan Elder said the acquisitions mainly were due to consolidation in the health care industry.
'The pressure on single-product companies to want to consolidate with bigger, financially strong, broad product line companies led to the number of acquisitions we were able to close this year,' Ms. Eld
er said.
Not everyone was buying, as some companies found 1995 to be a sellers' market.
Figgie International Inc. raised between $200 million and $250 million to pay down its debt through the sale of 13 subsidiaries or divisions through the course of the year.
Rob McCreary, managing partner for Figgie's local investment banking firm, Carleton, McCreary & Holmes, said two factors drove up the prices sellers such as Figgie were able to demand in 1995. The first was a burgeoning stock market, which increased the value of the stock public companies often use as currency in acquisitions. The second was about $9 billion in private equity that was raised nationally in 1994 and 1995 to fuel buy-outs, Mr. McCreary said.
Both the high stock prices of acquirers and an industry consolidation that has been going strong for the last decade fueled even more bank mergers and acqui-sitions in 1995. Close to home, National City Corp. announced in August that it had agreed to acquire Pittsburgh-based Integra Financial Corp. for a stock swap valued at $2.1 billion. A month later, Fifth Third Bank announced it would buy 28 Northeast Ohio branches with $1.4 billion in area deposits from San Francisco-based First Nationwide Bank for about $129 million.
National City chief executive David Daberko said the banking industry's rush toward new technologies and services motivated many smaller banks to partner with larger banks to remain competitive. National City's relatively high stock price put it in a position to make acquisitions that had little or no negative effect on its immediate earnings per share, Mr. Daberko said.
And, as 1996 begins, there's no end in sight to the deal binge. The experts see no shortage of capital on the horizon and stock prices continue to rise. They anticipate a market that will continue to support prices high enough to entice sellers and competitive forces that will prompt buyers to pay those prices.
Editorial researcher Laura Falacienski contributed to this report.